Retail sales bounce back in March

Advertisement

By Leith van Onselen

The Australian Bureau of Statistics (ABS) this morning released the retail trade data for the month of March, which registered a solid bounce in retail sales that beat analyst’s expectations.

In seasonally adjusted terms, retail sales rose by 0.9% in the month of March and by 3.7% year-on-year – more or less in line with both the rate of inflation and population growth. Analysts had predicted a rise of only 0.2% for the month.

Below is a chart summarising the monthly and annual growth rates by industry on a seasonally adjusted basis:

Advertisement

As you can see, it’s a mixed bag, with ‘food retailing‘, ‘other’ and ‘Cafes, restaurants & takeaway food’ growing solidly over the year. By contrast, ‘clothing footwear & personal accessories’, ‘Department stores’, and ‘household goods retailing’ experienced subdued growth over the period.

At the state level, the resource states (particularly Western Australia) have experienced far higher retail sales growth over the year compared with the non-resource states; although New South Wales and Victoria experienced a solid quarter:

Advertisement

The below chart shows the growth of retail sales by sector in chain volume (real) terms since 1998:

Advertisement

Mirroring the strong growth of Australian house prices over this period, ‘household goods retailing’ has been by far the star performer, but slowed significantly post Global Financial Crisis.

At the state level, you can see Western Australia’s out-performance more recently, and New South Wales’ under-performance over the period:

Advertisement

Notwithstanding this quarter’s bounce, overall retail sales growth has clearly decelerated in chain volume terms, after solid growth to 2007:

This month’s bounce in retail sales is a solid result after significant recent weakness. It will be interesting to see if last week’s interest rate cut can keep the sales momentum coming, or whether the upcoming budget cuts and concerns about job security etc keeps consumers in their shells.

Advertisement

[email protected]

www.twitter.com/Leithvo

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.